DuPont Decomposition
Why does GAIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.5% = 5.3% × 1.01 × 1.58
Latest: FY2026
Profitability
Net Margin
5.3%
13.3% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
0.96x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
1.51x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.6 pp over 5 years. Driven by net margin declining (13.2% → 5.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.3% | 0.96 | 1.51 | 19.1% |
| FY2023 | ₹0Cr | ₹0Cr | 3.9% | 1.35 | 1.66 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 1.07 | 1.62 | 12.9% |
| FY2025 | ₹0Cr | ₹0Cr | 8.8% | 1.07 | 1.57 | 14.7% |
| FY2026 | ₹0Cr | ₹0Cr | 5.3% | 1.01 | 1.58 | 8.5% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.